U.S. trade deficit drops 15%

The 2018 first quarter goods trade deficit with China and with the world is significantly larger than figures for the first quarter of 2017 even as the March monthly goods deficit with China declined as USA exporters accelerated shipments to beat tariffs that may be imposed relating to the 301 action, which gave an extra boost to us exports overall this month.

The trade deficit with China, as President Donald Trump says has benefited from bad USA trade policy, fell 11 per cent to $25.9 billion in March.

The government's figures closely matched analysts' expectations and represented the largest one-month decline in the trade deficit in two years, Efe reported.

U.S. President Donald Trump has threatened tariffs on up to $150 billion worth of Chinese goods to punish Beijing over its joint-venture requirements and other policies Washington says force American companies to surrender their intellectual property to state-backed Chinese competitors. The unemployment rate is at a 17-year low of 4.1 percent, close to the Fed's forecast of 3.8 percent by the end of this year. With labor conditions tightening, wage growth is picking up. Given the failure of the Trans-Pacific Partnership to obtain majority support in Congress, such a major redo of the past USA trade agreement model is also necessary for a new pact to be approved by Congress.

Over the past three years, the worsening of the non-oil trade deficit has been comparable in magnitude to the worst part of the 2000s "China shock" period, reaching 3.5 percent of GDP between 2014 and 2017 compared to 3.6 percent of GDP between 2002 and 2005.

That outweighed growth in exports, which rose 3.7 per cent to $47.6-billion, their biggest gain in four months and their second-highest level on record.

Exports also showed broad strength, with nine of 11 sectors rising.

Meanwhile, imports from China led the increase with 26.6 percent, mainly on higher imports of computers and computer peripheral equipment and of communications and audio and video equipment. Crude oil imports dropped by $0.5 billion in March. "We are very happy to see that", said Peter Hall, chief economist at Export Development Canada.

Interesting enough the United States is also beginning to pull investments Canada once use to get as a recent report from RBC states that investments are leaving Canada "in real time" for the United States.

And, wheat exports rebounded in the month, up 52 percent, following a sharp decline in February, which coincided with rail transportation disruptions in Western Canada.

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